Rents for units are rising at a faster pace than house rents

A lack of first home buyers and demand to live in inner city areas, has driven up unit prices throughout most of the country.

The latest rental report by Australian Property Monitors has revealed unit rents are growing at a faster rate than rents for houses in most capital cities.
In the past year Darwin unit tenants have experienced the biggest increases in their median asking rents, which are up by 5.8 per cent to $550 a week.

House rents increased the most in Melbourne for the year — up by 5.6 per cent to $380 a week.

In the June quarter house rents in many capital cities either dropped or didn’t move.

Sydney was the only city to record an increase in house rents during the quarter of 2 per cent. Darwin had the biggest drop of 7.1 per cent.

In the unit market rents jumped highest in Hobart — up 4 per cent to $260 a week in the June quarter. The biggest drop was in Canberra where the median asking rent of $385 a week was up by 3.8 per cent.

APM senior economist Dr Andrew Wilson says the increases in unit rents reflect that demand is increasing. He says that was because units were often cheaper than houses and were closer to lifestyle precincts in the heart of the CBD.

“I think generally we are starting to see a leaning toward that inner city living and also apartment living, it is also a lifestyle choice in most of the capital cities, particularly Sydney, Melbourne and Brisbane.

“Demand for rental properties in Sydney and Melbourne saw the rental market strengthen over the quarter,” he says.

During the June quarter Sydney unit rents reached a new peak of $500 a week.

“In both cities (Sydney and Melbourne), the median asking weekly rent for units is just $10 behind the median asking house rent.”